Toyota’s Loss: A First Time For Everything

Monday morning, Toyota Motor Corporation (TM) announced it expects its first loss in 70 years. But the Japanese automaker sits on almost $19 billion is cash with little debt - a far cry from the dismal situation over a General Motors (GM).

Around the world governments have been struggling to find answers to the collapse of the credit markets. The result has been massive government investments and bailouts. But it’s been the auto industry that’s drawn the most criticism and debate.

Canada just announced it would be injecting $3.3 billion into its auto production to prevent production from moving across the boarder. And their auto industry accounts for a much larger share of their economy than in the United States.

Their program helps Toyota and Honda Motor Corp (HMC), as well, not just the “big three” President Bush is trying to save. But what’s the ultimate cost for the auto industry?

It’s well documented that politicians make poor CEOs. Decisions for the good of the customers, country, and a company’s bottom line often contradict themselves. A company concerned about what their federal “owners” want, aren’t going to be as focused on returning value to shareholders.

And ultimately, that’s why investors buy stock.

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